IVA
If you owe more than £15,000 and earn a salary and / or have surplus monthly household income, then an IVA is often the most appropriate solution to your debt problems. If you are experiencing problems with your monthly bills and repaying creditors please contact X-debt for assistance as soon as possible. If an IVA is not appropriate in your situation we will advise on the best course of action. For those with unsecured debts of less than £15,000 then a debt management scheme or other debt solution may well be your best option.
We provide a very personal service so you are confident you are receiving the best possible help. Our in-house Insolvency Practitioner is on hand to answer any queries you may have. Please take our Debt Test to see which option may be most suitable for you or call us free of charge on 0800 043 2424 now. You can also provide extra information so we can fully assess your situation here.
What is an IVA?
An IVA or Individual Voluntary Arrangement is a contract between you and your creditors. Generally you pay an agreed monthly sum, usually for 5 years. This is divided up between your creditors, who accept the sum in settlement of the amount you owe them and agree to write off a portion of your debt.
How much will I have to pay?
Your monthly payment depends on your income and expenditure, and has to be affordable to you. A standing order authority will be set up and your first payment must be made prior to the creditors meeting.
What kind of people enter into IVAs?
In a nutshell - people who can't pay their debts. If you are unable to pay your debts as they fall due, you are insolvent and the law gives you three alternatives - bankruptcy, Debt Relief Order or an IVA.
Are there other options?
You could get all of your creditors to reschedule your debts, but this may be difficult if you have a lot of creditors. Some banks and building societies have debt counselors for you to speak to. However, unlike an IVA, an informal arrangement offers no guarantees. One or more of your creditors could change their mind at a later date AND make you bankrupt, or charge you high rates of interest later if your circumstances improve. You may also take longer to finally clear your debt. Please take our Debt Test to see which option may be most suitable.
What are the advantages of an IVA?
We help you to calculate what you can afford, and you make just one payment to your client account by standing order each month. The amount is the same over the entire period of your IVA, unless your circumstances change but not in relation to the cost of living rise and you can afford more. Typically, your circumstances will be reviewed once every year. Once your IVA is approved, all your creditors are legally bound by its terms, as long as you stick to your agreement. Once the agreed term of your IVA is complete (usually after 5 years), you have no further obligations to your creditors. At this point you stop paying the monthly sum, and make a fresh start. Your employment will probably not be affected. Your employers will not know about your IVA unless you choose to tell them. Unlike bankruptcy, an IVA is not advertised in the local press and does not exclude you from running a business or lead to many professions terminating your employment. Please take our Debt Test to see which option may be most suitable.
What do I need to do?
Before your IVA proposal is put to creditors you need to sign it as a "Statement of Truth". You do not need a solicitor for this, you simply read it and sign it. We prepare all documentation for you and we contact your creditors on your behalf. A meeting of creditors will then consider your proposal. You will not usually be required to attend - usually most creditors do not attend themselves, voting by proxy instead. Even if creditors do attend, the meeting only lasts for 15-20 minutes. Someone from X-debt will chair the meeting, and you need to be available by phone during this period.
What else should I know?
A bankruptcy income payment order can be over up to 3 years. The duration of an IVA is 5 years. However, this voluntary increase in the payment term should make your creditors sympathetic to your proposal.
Will my home be safe?
It is not usual to have to sell your property when in an IVA. If you do own your home, you will need to take reasonable measures at the end of your IVA to make any equity available to your creditors (usually by re mortgaging). This requirement is also true for bankruptcy, where normally the joint owner would have to buy your share or alternatively the property would need to be sold..
What if my creditors don't agree?
75% of votes (in value) at your creditor meeting must be in favour of your IVA proposal. Creditors can suggest modifications to your proposal and you can choose whether to accept them or not. If your creditors don't vote in favour you will still have the option of an informal arrangement with your creditors, or of bankruptcy.
Do I have to pay any costs?
X-debt does not increase your indebtedness. Fees are taken from the agreed payments into your IVA. Providing you keep to the agreement for five years, any debt you can't afford to repay will be written off by your creditors. You pay only the affordable monthly amount you and your creditors agree to under the terms of the IVA. Any fees for the initial arrangement and subsequent supervision of your IVA are included in the monthly payment agreed and approved with your creditors.
Please take our Debt Test to see which option may be most suitable.